Analysis and evaluation of effectiveness of the Board of Directors

Purpose of the analysis and evaluation

To enhance the effectiveness of the Board of Directors and increase corporate value, the Company conducts an annual evaluation of the effectiveness of the Board of Directors. An overview of the evaluation process, results, and related matters is disclosed to stakeholders.

Process of the analysis and evaluation

Questionnaire survey for all Directors (January; multiple-choice and descriptive questions)
Interviews with all Directors (February–March; external third parties are engaged periodically)
Topics:
- Oversight (the role of the Board of Directors, management issues, and corporate culture)
- Performance of Directors
- Board operations, Chairman of the Board, composition, audit, nomination, and remuneration
Deliberations by the Board of Directors (March)
- Review of the questionnaire and interview results
- Discussion of priority issues to be addressed by the Board of Directors
Deliberations by the Board of Directors (April)
- Determination of the evaluation results and disclosure content

Results of the analysis and evaluation

The Board of Directors evaluated that substantive discussions contributing to the enhancement of corporate value are being actively conducted and that the Board is functioning effectively.
To further enhance the effectiveness of the Board of Directors, the following initiatives were implemented in fiscal 2025.

Challenges recognized in the fiscal 2024 evaluation of effectiveness		Fiscal 2025 efforts to address those challenges
Continuous discussions, not only among Directors but also on the executive side, regarding the ideal role of the Board of Directors to support the Company’s sustainable growth and enhance its medium- to long-term corporate value.	▶	Further deepening discussions among directors regarding the ideal approach to Board oversight. More clearly and precisely articulating the roles of the Board of Directors and directors.
Enhancement of agenda setting and issue identification to improve the quality of oversight, along with further strengthening coordination among the Chairman of the Board, the secretariat, and the presenting divisions, as well as enriching discussions on the identified issues on the executive side.	▶	Setting agendas and key discussion points based on company-wide strategies and management issues. Advance identification of key discussion points by Outside Directors. Sharing information on initiatives to enhance the effectiveness of the Management Committee and to invigorate strategic discussions on the executive side.
Engage in healthy debate that takes into consideration more diverse perspectives and opinions from inside and outside the Company	▶	Facilitation by the Chairman of the Board to encourage active participation and comments from each Director. Off-site discussions among all Directors regarding value creation.
Provide Outside Directors with more opportunities to learn about the views and initiatives taken by the executive team	▶	Expansion of business execution reports from the executive side. Establishment of opportunities for Outside Directors and Executive Directors to engage in discussions outside the Board of Directors meetings.

Progress in Enhancing Board Effectiveness

Since the commencement of effectiveness evaluations in fiscal 2015, the Company has continuously implemented initiatives to enhance effectiveness.

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Future initiatives

To further enhance the effectiveness of the Board of Directors, the Company will continue refining initiatives that have proven effective to date, while also advancing the following measures to address remaining areas for improvement.

Continuous discussions among Directors and on the executive side regarding the ideal approach to Board oversight and the roles of Outside Directors in contributing to the enhancement of medium- to long-term corporate value.
Greater focus on agenda setting, identification of key discussion points, and allocation of discussion time in order to enhance the quality of oversight, together with further strengthening coordination among the Chairman of the Board, the secretariat, and the executive side.
Continued sound discussions reflecting diverse perspectives and opinions from both inside and outside the Company, as well as the strategic use of off-site discussions.
Further enhancement of opportunities for Outside Directors to gain a deeper understanding of the executive side’s perspectives and initiatives regarding company-wide strategies and management issues.